A company\'s income statement showed the following: net income, $294,754; deprec

Question

A company's income statement showed the following: net income, $294,754; depreciation expense, $29,115; and gain on sale of plant assets, $20,204. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,177; merchandise inventory increased $19,993; prepaid expenses decreased $9,407; accounts payable increased $3,228. Calculate the net cash provided or used by operating activities.

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Explanation / Answer

Cash flows from operating activities Particulars Amount $ Amount $ Net Income     294,754 Non cash Non operating Items Add: Depreciation        29,115 Less: Gain on sale of Plant assets     (20,204)          8,911 Decrease in current assets and increase in current liabilities Decrease in accounts receivable          9,177 Decrease in prepaid expenses          9,407 Increase in accounts payable          3,228       21,812 Less: Increase in current assets and decrease in current liabilities Increase in Inventory     (19,993)     (19,993) Net cash provided by operating activities     305,484

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